Banks desert rural areas

PUBLISHED: 13:48 14 January 2008 | UPDATED: 19:26 05 July 2010

High street banks will come under fire today for creating financial “deserts” in the countryside as a new report revealed how vital facilities such as bank branches and post offices are rapidly disappearing from our rural towns and villages.

High street banks will come under fire today for creating financial “deserts” in the countryside as a new report revealed how vital facilities such as bank branches and post offices are rapidly disappearing from our rural towns and villages.

A report published by the government's own rural watchdog reveals that people living in the countryside have poorer access to banks and free cash machines than those living in urban areas - and charts the decline in other services such as GPs surgeries, jobcentres, NHS dentists, post offices and petrol stations.

Exploring the provision of financial services for people in rural areas, the Commission for Rural Communities (CRC) State of the Countryside report 2007 reveals that:

about one in eight banks and building societies branches can be found in rural areas, although a fifth of the population lives in the countryside.

fewer than one in 10 cashpoints is in a rural area and fewer of them are free to use - about 45 per cent are charge-free cashpoints compared with 60 per cent in urban areas.

300,000 people in rural areas do not have bank accounts.

more than one in five rural households live in poverty.

According to the watchdog's report, banks and building societies, GPs surgeries, jobcentres, NHS dentists and petrol stations, have all seen a decline in the number of outlets in both rural and urban areas over the last year.

The CRC warns a lack of availability of a number of key services can lead to financial services “deserts,” which are areas that do not have a bank or building society, a post office or a free cashpoint nearby.

The report comes as postmasters across Norfolk brace themselves for the threat of post office closures, with a public consultation into the fate of the county's network due to start at the end of March.

Last month mail bosses announced the closures of six post offices in north Suffolk, including offices in Lowestoft Road in Reydon, Flixton Road in Bungay and Low Road, Bramfield.

It was also agreed in principle to replace a further 17 branches including those in Wrentham, Walberswick, and Wangford with part time “outreach” services typically provided from a van or from within local facilities like village halls.

The government has told the Post Office that it must close 2,500 post offices because the network as it stands is unsustainable.

In a bid to create greater awareness of the financial services needs of rural people, the CRC has launched its Quids In campaign.

CRC director of practice Graham Russell said: “In terms of access to financial services, no one should be disadvantaged by where they live. The work we are launching today has highlighted some invaluable examples of community-led approaches to the provision of financial services in rural areas.

“It is really encouraging to see communities doing it for themselves and I hope that these inspiring examples will now encourage many more locally-based solutions. I also believe that these sorts of community inspired initiatives can be extended to provide alternative provision of post office services in towns and villages around the country.”

Mr Russell said the government, private business and the communities themselves could do more to improve the situation.

“We are calling on the private sector to engage more extensively with rural communities and support and encourage future initiatives; government to help promote the value of community-based initiatives and how they can be applied and supported elsewhere; and communities to come forward with further examples of successful locally-developed solutions so these can be shared more widely,” he said.

“I now look forward to further positive steps being taken to ensure no one is excluded from access to financial services and sources of financial information and advice, no matter where they live.”

The campaign has won the backing of the Citizens Advice Bureau. Teresa Perchard, the organisation's director of policy, said: “We welcome the campaign to create greater awareness of the financial services needs of people in rural areas.

“Citizens Advice Bureau see first-hand the difficulties people living in rural areas experience, and Citizens Advice has actively campaigned for better access to bank accounts, free cash machines and affordable credit, as well as more affordable housing and better rural transport.”

The Campaign for Community Banking Services (CCBS) also welcomed the campaign. Director Derek French said: “Rural communities have been consistently hard hit by bank branch closures. In the notorious April 7th 2000 Barclays' cull, 90 villages lost their only bank and the recent abandonment by Lloyds TSB of its 'keep open' pledge in respect of rural communities where it is the last bank has already led to over 20 'last bank' closures and put another 100 at risk. Today over 500 rural communities have only one bank remaining.

“CCBS has for many years recognised the banks' difficulties in serving smaller rural communities and its shared banking proposals for 'community banks' and 'banking centres' take full account of the banks' needs as well as incorporating, where appropriate, a role for post office services, financial advice and community based initiatives.

“A sustainable solution to branch closures, validated and operated elsewhere, is available if the banks can be persuaded to take it forward.”

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